“To win the future, we must dream big and build big”

June 30, 2011

America’s Interstate Highway System celebrates 55 years

This is the best example of how public infrastructure can really anchor tremendous economic growth. We can learn from history and use this time of economic challenge to conceive of equally profound infrastructure goals. From Fastlane, the blog of U.S. Secretary of Transportation Ray LaHood:

As President Obama has said, to win the future, we must dream big and build big. One of the best examples of dreaming and building big in our nation’s history is America’s Interstate Highway System, which marks its 55th anniversary today.

On June 29, 1956, President Eisenhower signed the Federal-Aid Highway Act of 1956, which established a program for funding and building the new system. This legislation has been hailed by historians as one of the top ten bills in American history, surpassed only by the Civil Rights Act and Medicare, and the Interstate Highway System has been called the greatest public works project in history.

The Act proposed a length of 41,000 miles of limited-access roads linking 90 percent of all cities with populations of more than 50,000, and directed the federal government to distribute $25 billion among the states over 13 years to meet 90 percent of the cost.

In addition to the original 41,000 miles, several complete Interstate Highways have since been added to the original system, which is currently about 47,000 miles long.

The Interstate Highway System is critical to our economy and our way of life. Through 10 presidential administrations and 28 sessions of Congress, Americans planned and paved a state-of-the-art highway network that connects people with schools and jobs, and carries products of agriculture and industry to market.

Although the Interstate System accounts for about 1.1 percent of the nation’s total public road mileage, it carries 24 percent of all highway travel.

Research concludes muniland is about $3.9 trillion

Daniel Berger of Thomson Reuters Municipal Market Data has published an excellent study on the size of the municipal bond market that disputes the official data that the Federal Reserve stores.

The Federal Reserve’s estimate of the size of the U.S. municipal bond market at $2.9 trillion is “erroneous,” and the actual amount of outstanding debt is likely $1 trillion higher, according to a report from Municipal Market Data released on Wednesday.

Each quarter, the Federal Reserve calculates the size of the muni market from holdings by institutions in its Flow of Funds report, but does not have a precise way to measure the holdings of households, which have become a greater force in the market, according to the report. “The commonly accepted numbers offered by the Fed are erroneous and should not be used when discussing outstanding municipal bonds debt,” said MMD, a Thomson Reuters company in the report, which synthesized all of the available data and research on the market’s size.

MMD believes that if the Fed revises its methodology, it will conclude the market is closer to $3.9 trillion. It said the central bank “is aware of the flaws inherent in their data” and will likely change how it gathers information about total debt outstanding.

Fiscal year 2011 comes to close

Today is the last day of the fiscal year for most states, and they are scrambling to complete their budgets.  Almost all states work from a fiscal year that begins on July 1 and ends on June 30. We will be watching for some good analysis of how the states managed to bring in balanced budgets. Please send any you see to us. Thanks.

Mini sweeps

Pew Center on the States: Pew Conference: State Pension and Retiree Health Benefits

National Institute on Retirement Security: Lessons from Well-Funded Public Pensions

Reuters: U.S. enters next round of public pension fight

SEC: XBRL Implementation Guide for Nationally Recognized Statistical Rating Organizations

Bloomberg: Lower-Rated Hospitals Pay Biggest Penalty on Debt Since 2009

Columbus Dispatch: Ohio House passes $55.8 billion ‘reform-oriented’ budget

Orange County Register: Amazon ends deal with 25,000 California websites

Bloomberg: Buffett’s Forgotten $20 Helps California Budget

Financial Times: Puerto Rico enjoys revived appetite for US muni bonds

Orange County Register: Who has the highest-paid city finance director?

Muniland reference data: Datapooloza

One comment

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The days of “dreaming big”, as you call it, are over. The Federal Highway system was actually justified as a defense measure. Hitler’s Autobahns were the role model.

As to what one is supposed to “dream big” about, try to name something that impacts anything having to do with community development that doesn’t mean going through countess Federal, state and local rules, regulations and local planning boards. That process can take years to gain approvals and permits. In 1956, few towns or cities even had planning and zoning boards

This is not an age for big dreams. A few daydreams might pass the myriad review boards – NIMBY is their mantra – but if any project requires making a major impact on communities you can expect an army of resistance.

This country could benefit from a more extensive rail and public transit system but extending it beyond the urban centers will be nearly impossible. Not even the rights of way of a very extensive rail system, that once existed here, is even intact any more.

This entire entire article really represents a debt pimp. 1956 was a year in two decades of a growing middle class. 2011 is perhaps ten years into the age of the shrinking and heavily indebted middle class and the desperate and growing low-income class. But no one sells municipal bonds to help them.

BTW – prior to the interstate Highway system, the railroads did the same job and a lot more efficiently. One or two locomotives could pull a mile of freight cars.

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